has two parts.

Part A) The profitability index (PI) of a project is 1.1, and initial cost of the project is $1,000 .

(a) What is the project's net present value (NPV)? (Hint: you need to provide a number)

(b) Compare the IRR with the required rate of return, which is higher?

(c) Are you going to accept or reject the project? Why?

Part B)

if instead , you face an investment that costs $100,000 and has a cash inflow of $25,000 every year for 6 (six) years . The required return is 9% (Hint: this 9% cannot be used in part (A)).

(d) What is the NPV?

(e) What is the MIRR?